YouSaid · the spoken record

David Conrod

lines on the record: 78
first: 2022-01-28
most recent: 2022-01-28
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“To the artist. The artists, I think, I don't know the exact number, but I think every time a song is downloaded on iTunes, the songwriter gets, I think it's 11 or 12 cents But Spotify with the streaming so the younger artists are doing well because the people listening to Spotify are not my parents. And so. New classics Performing much better than Louis Armstrong as being downloaded or streamed. But I think we see music royalties. We're working with a group that not only does music, but they'll be coming out. They specialize in film and TV royalties. And TV now, you have a lot of series that are picked up over and over for multiple seasons. Gets picked up, those royalties behave. In a similar fashion to a film library, the TV series And so that self liquidating mezzanine debt. And so there's no capital markets event required for an exit.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one thing we've seen the last couple of years is music royalties almost every month there's a new group targeting that and that emerged because these songwriters these artists were unable to tour and so that was a big source of their income is to being able to tour and now they're looking to sell some or all of their copyrights to cash out.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that has helped, but these limited partners are probably being bombarded by more and more emails incoming And so it's still more valuable to have the one on one in person. But when that is not available, we definitely try for the video call.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's making it a little bit more efficient now with annual meetings. There's always going to be a remote option. And so these limited partners were before and months of May, June, and September, October, November, you know. Most of the time, 50% of those, let's say six months, they would be out of the office spending a day or two days traveling cross-country to attend an annual meeting. Now they can watch it on Zoom for an hour. And be much more efficient sitting at their desk. I think that development, the fact that there is a remote option, is allowed general partners and capital raising firms like ourselves more a better probability of getting to a prospective investor that's in the office where they're not wasting time traveling. Or wasting a half a week traveling to annual meetings. So improve the efficiency”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's not bad. I think the younger guys would. We had some meetings Miami, we had some family offices. We had meetings outside. We did convert. Some in, I think, in the middle of the year. It was tough, though, April, May. April, May was, you know, everybody was on adrenaline, not really knowing what was going to happen. But a lot of Zoom, it was very exhausting, but people are traveling again and taking meetings. So it's...”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The GPs were, of course, they have one objective, which is to get funded. And so they will go ready, willing, and able to go anywhere. But a lot of the limited partners, especially the institutions were generally in the first six months of the pandemic, you know, not really willing to meet. Or they weren't good.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“2020 when people weren't traveling. How does an institutional investor modify their investment policy procedures to make a commitment to a fund when they're unable to visit the office if that's part of their policy? So a lot of those policies were amended or replaced with more reference calls and things like that.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Generally, it's, you know, if they're handed off to the GP, our job is to manage the process from the initial contact with the prospective investor. I think they're. A suspect before they're a prospect. And so we go out to several thousand investors probably initially to try to identify some prospects. And then once we have an initial meeting or initial video call, we It's our job to help manage that process and move the investor through the different stages that they're going to be thinking about towards making a positive decision. And that could be a second meeting to meet other members of the management team getting access to a data room to look at due diligence files, look at the portfolio performance, make some reference calls. Probably we'll do a visit on site to visit visit the offices. That was an issue during”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know, I need to have a manager that's got a differentiated strategy that is additive to their portfolio because that's what A lot of what a limited partner is thinking about how can I improve, diversify my portfolio.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. Our job is to try to identify that investor that is looking for a differentiated strategy. Where it's additive to their portfolio. To bring in another middle market buyout firm. Right now, everybody, or a lot of growth equity and these software firms are doing very, very well. Most funds are Doing well over 3x, right? And eyes glaze over almost with these limited partners to. Try to convince a limited partner to do more work. And you know what? I need you to substitute your existing manager for this new group. And I want you to take six months of extra work on your end to get the same return is a tough one.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. The capital into the thing. Right. That's exactly right. And so one of the things we do is we tell the GPs, the general partners, that, you know, they're in the automobile industry. They're selling cars every GP that comes in to see us is a smart, very clever guy. And these LPs can buy any car they want, you know, and they're probably going to do fine. So, the question”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And they're going to tell us about all the great deals that they've done and their track record and all that, and then verifying that by speaking to the CEOs to confirm that these are the guys that actually did the deals. We try to look at their files. Do the files track with what the CEO told us and what they told us? And if those three things match up, they probably do have a process and it's probably okay.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a lot of detail and it's a lot of work, but it's also having done it a lot, it's pattern recognition. And so we've met thousands and thousands of general partners looking to raise capital, whether it's a new team that's spinning out from a larger investment firm, or it may be a team that's proven themselves and are looking to raise capital and they'd like to meet some new investors. On the due diligence side, there's a number of things to do. We make a lot of reference calls, talk to the CEOs of the companies that they've backed to verify the track record that they're presenting. The reason we do that, it's almost a triangle to see if they actually do have a story straight. These GPs are all smart, clever guys.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The market had changed, and so they started doing some new aircraft. Boeing came out with a new 747-8. And so they put in an order for some new ones. And the existing fund one, the entire portfolio was sold to Another private equity firm had a listed vehicle to do aircraft leasing They needed to grow, so they just bought the entire portfolio. So we had a We generated a nice return in a very short period of time, proved out a nice track record, which enabled us to raise fund too.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a demand for a 747. So the team recognized that opportunity and did it. And it's actually a big job to convert. You know, you have to cut a hole in this, drill a big hole in the side of the aircraft. It's got to be structurally sound. Strengthen the floor, but we were pretty successful with that. I think six investments completed, proved out the thesis, and we raised $277 million for Fund One and the successor fund to get around to answering your question was $737. We got up to 741. We couldn't quite get to 747 in capital. And so we backed it down to 737. And true story. And”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we were introduced to a group that spun out of British Aerospace, and they had been buying commercial aircraft on their own account and engines that power them. And they were backed by big high net worth family on the West Coast that was the equity partner. It would be impossible to go to a bank to borrow money to buy a 747 without revealing who the source of your equity was. So they had to institutionalize their business. And so Guggenheim did that. And by committing some initial capital, we went out and the team went out and got some investments completed. And it was as the load factors were off, they were buying a lot of wide body 747s and converting them into freighter to take advantage of the global supply chain moving from just-in-time delivery, so component parts and things like that. That coming out of Asia to the west.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll give you an example at Guggenheim, for example. So we following early 2000s after After 9 11, air traffic was way off. A lot of the airlines went from wide body to narrow body. You notice that when you fly across country now, it's a single aisle, not a double aisle.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Whether it's talented investors inside a private equity firm, other independent sponsors that are more comfortable or confident in their ability to find profitable transactions. And I've been unable to convince them to do a fund or talented limited partners that have been Investing in the asset class for a number of years. Continue to see it evolve, but looking back, we've probably raised capital for over 20 first-time funds, which requires a lot of work. Reason you do it is for the successor funds.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And more using the balance sheet that they were building to act more as a direct investor middle of 2010, a lot of us on the capital raising private fund group inside Guggenheim became independent. We're still very close with a number of the people that were there when we were there. And focus point raises capital for private funds and direct transactions. And I would say it's similar to what we were doing at Guggenheim and that we're continually meeting with investors and general partners. One dynamic I'm noticing is increasingly the capital raising business were acting almost like a search firm because we're continually meeting investment talent.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Provide. Yeah. So we learned a lot at HSPC. It's a minority shareholder is an insurance company and that seeded a number of the funds that we raised at Guggenheim. So in addition to using the broker dealer at Guggenheim to raise third-party capital, Guggenheim was a principal in a number of different strategies. We would identify the management team, the insurance company would provide some seed capital to get some investments completed and then we would go out to the market and raise the initial fund. And then we would generally raise the follow-on fund two or fund three and a number of credit related strategies as well as some equity. Following the financial crisis in 2008, Guggenheim I would say less interested in seeding new managers”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of the funds that were fully invested by the time of the Crisis and the currency crisis in late 97, early January 98 were really hurt. They were generally borrowing. Reduced by 10 times. And so it was tough. So once we raised the successor fund, all the U.S. private equity firms started to come into Asia forming groups, all the big names started to hire teams to take advantage as they were trying to expand their footprint. HSPC stayed in the, I would say, the lower mid-market, raised another fund in 2002, 2003. I was at Guggenheim at that time and they became a client. So it worked out well that not only the group in Asia that we raised capital for, but HSBC had a group in Latin America and also a group in Europe that spun out and is later rebranded themselves Montague, but we raised a little over $2.2 billion.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, not exactly a smoothly paved crew. India's changed quite a bit from the mid-90s. And then we raised a successor fund for Asia. After the Taipei crisis in Indonesia, Rupaya went from, I think, 2,000 to 20,000 overnight. And then the U.S. firms came into Southeast Asia and saw that as a big opportunity.”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“A little bit. So we raised, I think it was the largest Asian private equity fund ever. We closed it in, I think December 22nd, 1994. We raised 250, and then we raised a fund in India in the mid 90s, HSBC sponsored a team to invest in India and South Asia. It's probably one of the earlier ones then. I remember a drive with an advisory board meeting from Agra to Jaipur. I think it took eight hours. It'd be the equivalent of driving from New York to Hartford. Right. It took eight hours”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“World of private equity? Yeah, that was my entree into, and we went down to I think it was Merrill Lynch to talk to their fun placement. My boss was a CEO. There were six of us and the CEO told the general partner, a guy named David Patterson. Myself down there, and I saw the fees that were. That Merrill Lynch would earn on raising a private equity fund versus the fees I was getting raising the long only”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It allowed me to start a dialogue with some of the largest institutional investors in the United States marketing those products. And through that, I was introduced to an individual that owned 25% of a management company in HSBC owned 75% of where he had two small $35 million private equity funds focused on Southeast Asia and China. Performance looked pretty interesting. And his goal in 1992, I believe 93 was to try to raise some capital from the United States”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was exposed to private equity when I was at HSBC group after business school. And that's where I was exposed to it in the early 1990s. When I HSBC was on an acquisition binge in the late 80s, early 90s and acquired some asset management businesses in the US. And when I graduated Join them, and I was generally calling on institutions raising long only Southeast Asian equity mandates. And at that time, only the largest Pension funds and institutional investors would make an allocation to such a narrow strategy. And so it got me”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Owners of this brand, and we spent a little bit of time during 2000 and in October 2000 we merged the broker dealer with the Guggenheim brothers, created Guggenheim Partners, and then also in the same month closed on, I believe it was $28 million in working capital. And then we had a reverse merger also in the same month with a commercial paper conduit in Chicago by the name of Liberty Hampshire. And the CEO and founder of Liberty Hampshire, Mark Walter, is still Guggenheim's CEO today”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. I left HSBC Group at the end of 1999, and some friends of mine that I'd known a long time had came out of the fixed income side of investment banks, generally top II rated mortgage research and traders, fixed income salesmen to raise third-party capital, a broker-dealer is required. established a little fundraise up group at this small broker dealer. With the knowledge that we were going to try to create a financial brand out of a museum name. And one of the founders of the broker dealer was very close to the Guggenheim family, the father and the son that were”
2022-01-28 · Masters in Business · David Conrod on Successor Funds and Growth Equity (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source